Robert BlockThanks, Matt. Good morning, and thanks for joining us today for Allstate's first quarter 2012 earnings conference call. We'll begin this morning with some prepared remarks from Tom Wilson, Steven Shebik and me. Following that, we will open it up for your questions. Joining us for the Q&A session are Don Civgin, Head of Allstate Financial and Insurance; Judy Greffin, Chief Investment Officer; Sam Pilch, our Controller; and Matt Winter, Head of Auto, Home and Agencies. Late yesterday, we issued our press release and investor supplement, as well as our 10-Q for the first quarter of 2012. We also posted a slide presentation, which will be used in conjunction with our prepared remarks. As noted in our press release and 10-Q, Allstate adopted new deferred acquisition cost accounting guidance on a retrospective basis as of January 1, 2012. Accordingly, all prior period balances have been adjusted. The DAC and shareholders' equity balances were reduced by $572 million and $376 million, respectively, when compared to the previously reported December 31, 2011 balances. We filed an 8-K yesterday reflecting these adjustments, and we added a few pages in our investor supplement that have details on the adjustments. All of these documents can be accessed from our website. Referring to the first slide of the presentation, this discussion may contain forward-looking statements regarding Allstate's operations. Actual results may differ materially from those statements. So please refer to our 10-K for 2011, our 10-Q for the first quarter 2012, our 8-Ks filed yesterday in May 2 and our most recent press release for information on potential risks. This discussion will contain some non-GAAP measures for which there are reconciliations in our press release and on our website. As always, I'll be available after this call to answer any follow-up questions you may have.
Now let's begin with Tom Wilson.Thomas J. Wilson Good morning, and thank you for joining us on what I know is a very busy day for you. I'll cover our performance relative to our 2012 priorities. Within the context of our overall strategy, Bob and Steve will follow with more details on the drivers of our results. If you go to Slide 2, our strategy is to sell unique protection products to different customer segments. The left side prefers to personal assistance of a local agent, whereas the right side is very comfortable purchasing directly from a call center over the web. The lower segments -- the segments on the lower half of the grid are less price sensitive than the upper half. So we serve all 4 segments to customers. Our 2012 priorities are to maintain auto profitability, to raise returns in homeowners and the annuity businesses, to grow insurance premiums and to proactively manage our investments and capital. So this strategy and those 2012 priorities are designed to enable us to achieve the goal of producing operating return in equity of 13% by 2014. Turning to Slide 3. It was a good start for 2012, with strong financial results for the first quarter. On a consolidated basis, we generated net income of $766 million. It was an increase over the prior year first quarter of 46%, and it was driven primarily by improvements in operating results. On an operating income basis, we increased almost 44% to $710 million or $1.42 per diluted share. The underlying Property-Liability combined ratio for the quarter was 88.1, which is 1.8 points better than Q1 of 2011. Now we made progress in each of our priority areas. We maintained auto profitability in the first quarter, with the Allstate brand standard auto combined ratio of 95.2, an increase of 0.2 points compared to Q1 of 2011. Now there's some pressure on the cost side of business, which we're addressing to protect our margins. We continue to improve returns in homeowners, with an underlying combined ratio for the Allstate brand of 67, which is 7 points better than the first quarter of last year and essentially, equal to the fourth quarter of last year. We remain focused on our profit improvement actions in this line, as continued improvement is a critical component to achieving the goal of 13% operating ROE by 2014. Read the rest of this transcript for free on seekingalpha.com